Abstract
This book, Cross-Border Entrepreneurship and Economic Development in Europe’s Border Regions, is about entrepreneurship and economic development, with an emphasis on the effects of European Union (EU) enlargement, both within that area and in neighbouring countries. It is concerned with cross-border entrepreneurial activity, which is referred to as cross-border entrepreneurship. The book is a collection of 10 edited chapters based on research undertaken in two related projects with broadly similar objectives and a common leadership, although the geographical focus and level of funding were different. While one project focused on regions in the newly-independent states, which had borders with EU member states – namely, Ukraine, Belarus and Moldova – the other was concerned with entrepreneurship in border regions within EU Member States.
The central argument developed by the editors in Chapter 1 is that cross-border entrepreneurship can provide opportunities for regional development as well as individual entrepreneurs. However, they point out that the relationship between entrepreneurship development and cross-border cooperation is likely to be a reciprocal one. While on the one hand, cross-border cooperation may act as a stimulus for entrepreneurship development in regions that appear disadvantaged and peripheral in many respects, on the other hand, the nature and extent of existing entrepreneurship in a region is likely to affect the level of interest in cross-border cooperation. This is because it will affect the number of individuals and businesses that seek the markets, suppliers, capital and know-how that cross-border enterprise cooperation potentially offers.
In the opening chapter, the editors illustrate the potential advantages of EU enlargement and cross-border cooperation, which include: offering a source of opportunity, which can lead to enhanced competitiveness for entrepreneurs and businesses; and subcontracting, which can reduce market entry costs and barriers with lower associated business risks. They also highlight that cross-border cooperation can present opportunities for entrepreneurial individuals to engage in trading activities, therefore offering a means of survival as well as a stepping stone towards the development of more substantial enterprises. Moreover, it can be instrumental in facilitating sustainable cross-border partnerships between enterprises and contribute to enhanced competitiveness for participating regions.
The editors then sound a note of caution that despite the potential advantages of cross-border cooperation, the heterogeneity of border regions and different levels of economic development, institutional settings and levels of entrepreneurship affect the process of interaction across borders. Thus, these features have implications for policymakers.
Venesaar and Pihlak expand on the consequences of EU enlargement for entrepreneurship and economic development in border regions in Chapter 2. They point out that consequences are caused by changes in the border status such as ‘the removal/emergence of visa requirements, custom duties, border queues, clearing formalities, quantitative and item restrictions on goods, and double tariffs, and wider socio-economic changes’ (p.38). The socio-economic changes include changes in trade regimes and the institutional and business environment, such as the nature and sources of competition. However, they argue that EU enlargement effects are likely to be different between internal regions with ‘soft’ borders, and external regions with ‘hard’ borders. While the effects on enterprises in internal borders are positive due to simplified border crossing, clearing formalities and movement of persons and goods, as customs fees, other restrictions and visa requirements are removed, the effects on external border regions may be mostly negative. The negative effects are due to the ‘hard’ border controls, the visa regime, quantitative restrictions on goods, complicated custom documentation, increased border queues and waiting time, as well as increased custom duties for third country visas. Venesaar and Pihlak also identify regional characteristics, such as the location of border regions, type of country (i.e. old or new EU members, candidate countries or third countries), and the level of economic development of the neighbouring cross-border region, as well as the historical and cultural factors likely to have potentially important enlargement-related effects.
In their contribution to the debate, Welter, Alex and Kolb consider the role of trust and learning in cross-border entrepreneurship in Chapter 3. They argue that in the cross-border context, trust plays an important role at the macro level due to the risks inherent in cross-border transactions. They distinguish between personal trust and ‘calculated’ trust which dominates in business relationships, and conclude that in the cross-border context, evidence shows personal trust ‘as having both calculative and non-calculative, routinized and habitual, elements, thus confirming its dual nature’ (p.60). In addition, they argue that empirical results show that both personal and institutional trust may be required for learning to occur.
While Chapters 4 and 5 deal with regional case studies from the EU, Chapters 6 and 7 discuss regional case studies from the newly-independent states. In Chapter 8, Slonimski, Pobol, Linchevskaya and Slonimska shift the focus from cooperation between enterprises to cross-border household and individual trading activities, with particular reference to cross-border trading and entrepreneurship in Belarus. They list the factors influencing households’ cross-border cooperation to include at the micro level: petty traders’ previous business experience; the vocational training of respondents and their family members, colleagues and foreign business partners; connections with relatives in neighbouring countries; knowledge of neighbouring countries’ languages, culture and customs, etc. At a macro level, these include: difference in prices, the quality and range of products and services, new opportunities in the markets in neighbouring countries; close proximity to a border, etc. The authors conclude by stressing that ‘cross-border cooperation in the western regions of Belarus with Poland, Latvia and Lithuania has deep roots in the history of the region’ (p.183).
Chapters 9 to 11 discuss the policy perspectives of the book. In Chapter 11, Smallbone and Xheneti examine the role of public policy in cross-border entrepreneurship. They suggest that creating a policy environment to facilitate productive forms of cross-border entrepreneurship is a necessary part of regional development strategies for these border regions. However, they argue that it is typically more difficult to achieve their suggestion in situations where the border is a ‘hard’ external border of the EU, where border controls represent a potential barrier to movement. They conclude that ‘policies to promote CBE [cross-border entrepreneurship] are unlikely to be successful unless the wider policy environment for entrepreneurship is positive’ (p.252). Therefore, policies to support cross-border entrepreneurship need to be embedded within wider regional development programmes promoting entrepreneurship, since the conditions that enable and/or constrain the process are affected by the wider social, economic, political and institutional context over which the state has a major influence (Smallbone and Welter, 2001).
The book is well structured and based on two research projects: ‘Cross-border cooperation in Belarus, Moldova and Ukraine’ (2005–2007) and ‘Cross-border cooperation and entrepreneurship development’ (2006–2008). Overall, the book successfully examines the issues involved in cross-border entrepreneurship, cross-border cooperation and economic development in Europe’s border regions. The book also successfully discusses the policy implications for cross-border entrepreneurship, and suggests that policies to promote cross-border entrepreneurship should reflect the wider state policy towards entrepreneurship and economic development generally. Therefore, I recommend this book as a good read to researchers, practitioners and policymakers.